Helping the Chronically Overworked Find Life Balance

Money In The Bank Means Freedom To Choose

Chapter 10: The People-First Life Part 2

To give you a preview of the post-idolatry world, I no longer worry about money.  Ok, truth be told, I never really worried about money.  I grew up poor, and have always felt that I could get by with less.

But when I was making money, I sure spent a lot of it. Part of the reason I spent money was that I was stressed. I need that fancy dinner to forget the office, and as a visible reward for the hard work.  And I tended to make big impulse buys.  Like art. My late uncle always used to sat that your standard of living will rise to meet your income. He was right.  And the reverse it true too.

Before resigning from my job 3.5 years ago, my wife and I spent two months examining the finances. She is so much better at budgeting than I am, and was quickly able to pull together the numbers. What could we cut back on if we went down to one income? It was amazing how much money we  could save without depriving ourselves e.g. babysitting, dry cleaning, lunches and dinners out, commuting expenses,  library fines and un-submitted insurance reimbursements. It added up.  And our tax bill went down.

As I wrote in the last chapter, it is impossible to predict the future. But there is one question that I think everyone should be able to answer.  How long could you go without earning any money?  In other words, if you lost or quit your job tomorrow, how financially secure are you? If you are the sole or primary breadwinner, the answer may be different than if you are a two-income family.

As you conduct the exercise, assume your burn rate will be the same. It will almost certainly go down, but the purpose here is to understand where you stand without becoming anxious that your life will need to radically change. You may be more secure than you realize.

Are concerns about money holding you back from changing jobs or trying to cut back on your hours? Money concerns are legitimate, but they can be overblown.  What feels like a money concern may really be about something else, In the next post, I’ll talk more about money, lifestyle, and priorities.

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Comments

  1. Great point, Greg. I’ve heard the money in the bank referred to as an “attitude account”. When you’ve got a financial cushion, you feel looser and more bold at work. I agree that it also represents freedom.

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  2. […] scares people. Which is why in the last post I recommend finding out how many months you could pay your expenses if you lost your income. But the fear isn’t completely rational – there is a fear of […]